What changed in this filing

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Item 1. Business

2021-03-22 compared with 2020-03-27 · 249 added, 456 removed, 161 unchanged (81% of the section changed)

In October 2019, we changed our name from

Neuralstem, Inc.

to Seneca Biopharma, Inc.

Historically, we have been primarily focused on the research and development of nervous

system therapies based on our proprietary human neural stem cells and our small molecule compounds with the ultimate goal of gaining

approval from the United States Food and Drug Administration (“FDA”), and its international counterparts, to market

Historically, we have been primarily focused

on the research and development of nervous system therapies based on our proprietary human neural stem cells and our small molecule

compounds with the ultimate goal of gaining approval from the “FDA”, and its international counterparts, to market

and commercialize such therapies.

In early 2019 we commenced an in-licensing and acquisition strategy in which we are evaluating

novel therapeutics that could benefit from our development experience with the goal of developing such technologies for commercialization.

Our patented technology platform has three

core components:

Over 300 lines of human, regionally specific neural stem cells, some of which have

the potential to be used to treat serious or life-threatening diseases through direct transplantation into the central nervous

Proprietary screening capability – our ability to generate human neural stem

cell lines provides a platform for chemical screening and discovery of novel compounds against nervous system disorders;

Small molecules that resulted from Seneca’s neurogenesis screening platform

that may have the potential to treat a wide variety of nervous system conditions.

In early 2019, we commenced a strategic assessment of our clinical programs to determinate how

to maximize shareholder value.

As a result, Seneca subsequently initiated an:

in-licensing and acquisition strategy in which it is evaluating novel therapeutics that could benefit from our development experience with the goal of developing such technologies for commercialization;

out-licensing strategy to find partners to acquire or license NSI-566 and NSI-189.

In-licensing and Acquisition Strategy

In early 2019, we engaged Hibiscus Bioventures

(“Hibiscus”) and initiated an in-licensing and/or acquisition strategy to expand our product pipeline.

Our in-licensing

strategy consists of evaluating novel therapeutics that could be synergistic to us with the goal of developing such candidates

for commercialization.

We believe that this element of our corporate strategy could provide new opportunities for product development

and diversify risks inherent in focusing on a limited product portfolio and therapeutic areas, thus potentially increasing its

probability of commercial success.

In December 2019, we further expanded this initiative and engaged Solebury Capital LLC (“Solebury”)

to help explore available strategic alternatives, including possible mergers and business combinations, a sale of part or all of

our assets, and collaboration and licensing arrangements.

Out-Licensing and Sales Strategy

Based on our review of existing clinical programs,

including required capital and time to market, we have initiated an out-licensing and sales strategy to find partners or interested

parties to acquire or license NSI-566 (neural stem cell) and NSI-189 (small molecule) and their respective clinical and pre-clinical

programs and development.

As part of this strategy, we begun winding down our ongoing development efforts, pre-clinical and clinical

stage studies.

In December of 2020, we licensed certain patents

and technologies, including a sublicense, related to the NSI- 189 small molecule program for $100,000 up front for a three (3)

year period, plus, upon the occurrence of certain events, the licensee has the right to purchase the NSI-189 small molecule program

for $5,000,000 at any time before the three (3) year period expires.

Our Present Focus

After conducting a strategic alternatives evaluation,

with a goal of maximizing stockholder value, we substantially reduced our workforce and have wound down and suspended our research

and development activities.

We continue to:

(a) provide support for patients who remain in clinical trials, (b) conduct our day-to-day

business operations including the limited remaining activities required to wrap up our trial (c) support our intellectual property

portfolio with a goal of maximizing stockholder value and (d) undertake our out-licensing and in-licensing acquisition initiatives.

Following our assessment, we commenced a process

of evaluating strategic alternatives to maximize stockholder value with the assistance of Hibiscus and Solebury.

After conducting

a diligent and extensive process of evaluating strategic alternatives and identifying and reviewing potential candidates for a

strategic acquisition or other transaction, which included the receipt of 15 non-binding indications of interest from interested

parties and careful evaluation and consideration of those proposals, and following extensive negotiation with a number of possible

candidates, on December 17, 2020, Seneca and Leading BioSciences, Inc.

(“LBS”) announced the signing of a merger agreement

(“Merger Agreement”).

Upon the terms and subject to the satisfaction of the conditions described in the Merger Agreement,

including approval of the transaction by our stockholders, a wholly-owned subsidiary of Seneca will be merged with and into LBS,

with LBS being the surviving entity and a wholly-owned subsidiary of Seneca (“Merger”).

Although we have entered into the Merger Agreement

and intend to consummate the transaction, there is no assurance that we will be able to successfully consummate the proposed merger

on a timely basis, or at all.

If, for any reason, the merger is not completed, we will reconsider our strategic alternatives and

could pursue one or more of the following courses of action:

· Dissolve and liquidate our assets.

If, for any reason, the merger is not consummated and we are

unable to identify and complete an alternative strategic transaction like a merger or potential collaborative, partnering or other

strategic arrangements for our assets, or continue to operate our business due to the inability to raise additional funding, we

may be required to dissolve and liquidate our assets.

In such case, there can be no assurances as to the amount or timing of available

cash left to distribute to our stockholders, if any, after paying our debts and other obligations and setting aside funds for reserves.

· Pursue potential collaborative, partnering or other strategic arrangements for our assets, including

a sale or other divestiture.

· Continue to operate our business.

Although presently not anticipated, we could elect to continue

to operate our business and pursue licensing or partnering transactions or utilize our intellectual property and research and discovery

Based on our prior assessment, this would require a significant amount of time, financial resources, human capital and

Seneca would be subject to all the risk and uncertainties involved in the development of product candidates.

In such instance,

there is no assurance that we could raise sufficient capital to support these efforts, that our development efforts would be successful

or that we could successfully obtain the regulatory approvals required to market any product candidate we pursued.

· Pursue another strategic transaction like the proposed merger.

Seneca’s Proprietary Technology Platform

Our patented technology platform has three core components:

300 lines of human, regionally specific neural stem cells, some of which have the potential to be used to treat serious or life-threatening

diseases through direct transplantation into the central nervous system;

screening capability – Seneca’s ability to generate human neural stem cell lines provides a platform for chemical screening

and discovery of novel compounds against nervous system disorders;

molecules that resulted from Seneca’s neurogenesis screening platform that may have the potential to treat a wide variety

of nervous system conditions.

To date, our technology platform has produced

two lead assets in clinical development:

two lead assets:

our NSI-566 stem cell therapy program and our NSI-189 small molecule program.

of our strategy is seeking an asset sale, out-license, or global development partnerships to further development of NSI-566 and

We have recently initiated a formal initiative aimed at securing partners to advance the clinical development of these

two programs.

We believe this technology, in partnership

with an established biopharmaceutical company with the appropriate development expertise and financial resources, could facilitate

the development and commercialization of products for use in the treatment of a wide array of nervous system disorders including

neurodegenerative conditions and regenerative repair of acute and chronic disease.

We intend to maintain these programs with the

goal of finding suitable development partners.

Recent Highlights

· On October 31, 2019, the Company announced it had entered into a non-binding term sheet with Jiangsu

QYuns Therapeutics Co., Ltd., (“QYuns”) for an exclusive license agreement for certain of QYuns Therapeutics’

assets, a pipeline of cytokine-targeted monoclonal antibodies for the treatment of a range of auto-immune diseases.

Subsequently,

on January 10, 2020, we filed a Current Report on Form 8-K disclosing that we were not able to reach a definitive licensing agreement

with QYuns and accordingly, no longer expected to complete this transaction.

· On January 17, 2020 we entered into an agreement with certain accredited investors from our July

30, 2019 underwritten offering.

Pursuant to the agreement the investors exercised certain warrants to purchase an aggregate of

5,555,554 shares of common stock having an initial exercise price of $2.70, at a reduced exercise price of $1.36 per share.

consideration for the immediate exercise of the warrants for cash, the exercising holders received new unregistered warrants exercisable

into an aggregate of up to 5,555,554 shares of common stock, at an exercise price of $1.23 per share, 2,777,777 of which have a

term of two years and 2,777,777 of which have a term of five years.

The Company received approximately $7.55 million in gross proceeds.

A component of our strategy is seeking

an asset sale, out-license, or global development partnerships to further development of NSI-566 and NSI-189.

We have recently

initiated a formal initiative aimed at securing partners to advance the clinical development of these two programs.

We believe our technology, in partnership with

an established biopharmaceutical company with the appropriate development expertise and financial resources, could facilitate the

development and commercialization of products for use in the treatment of a wide array of nervous system disorders including neurodegenerative

conditions and regenerative repair of acute and chronic disease.

Clinical Programs

Historically, we have devoted our efforts and financial resources

primarily to the pre-clinical and clinical development of our small molecule compounds and our stem cell therapeutics.

Historically, we have devoted our efforts and

financial resources primarily to the pre-clinical and clinical development of our small molecule compounds and our stem cell therapeutics.

Based on our cash position, we have refocused

our development efforts primarily on our exploratory Phase 2 study of NSI-566 for the treatment of Ischemic Stroke (the results

of which we do not believe will be able to be used in connection with any regulatory submission in any territory), development

of a regulatory plan for NSI-566 in ALS and studies that are being funded by grants.

At this time, we anticipate that additional

funds for these programs will be focused on maintaining the cell lines, patents, clinical material and data, and relevant licenses

associated with these clinical programs as we seek partners for further development.

Below is a description of our clinical

programs, their intended indication and current stage of development:

our efforts primarily on maintaining the cell lines, patents, clinical material and data, and relevant licenses associated with

these clinical programs as we seek partners for further development.

Below is a description of our clinical programs,

their intended indication and current stage of development:

NSI - 566 (Stem Cells)

The human central nervous system (CNS)

has limited capacity for regeneration following injury or the onset of disease.

The human central nervous system (CNS) has

limited capacity for regeneration following injury or the onset of disease.

Traditional therapies have mainly focused on minimizing

the progression or symptoms of CNS disease or injury but have not been effective at repairing the underlying cause of such disease.

The goal of our cell therapy initiatives is the regeneration of neural function which has been lost to disease or injury.

that neuroprotection, neuroregeneration, and/or bridging of damaged neural circuitry may be accomplished by implantation of NSI-566

at the injury site.

Our proprietary technology enables the

isolation and large-scale expansion of regionally specific neural stem cells from all areas of the developing human brain and spinal

cord and enables the generation of commercially useful quantities of highly characterized allogeneic human neural stem cells that

can be transplanted into patients to mitigate the consequences of CNS diseases or injury.

We have developed and optimized processes

that allow us to manufacture these cells under current Good Manufacturing Practices (cGMP) compliant conditions as required by

the FDA for use in clinical trials and have generated cell banks which we believe are sufficient to provide material to meet our

requirements through completion of Phase 3 studies.

We have exclusive licenses for the manufacturing and use of the surgical platform

and cannula that enable administration of the cells to the spinal cord for treatment.

Based on our preclinical data we believe

that our human neural stem cells will differentiate into neurons and glia after grafting into the patient and will provide neuroprotection

and stimulate neuroregeneration.

Our lead stem cell program is the spinal

cord-derived neural stem cell line, NSI-566, which is being tested for treatment of paralysis due to amyotrophic lateral sclerosis

(ALS, or Lou Gehrig’s disease), ischemic stroke, and spinal cord injury (SCI).

To date we have completed Phase 1 and Phase

2 safety and dose escalation studies in subjects with ALS and a Phase 1 safety and dose escalation study in subjects with motor

deficits due to ischemic stroke.

Each of these studies are currently in their long-term follow-up stage.

In August 2018, we initiated

a non-GCP (Good Clinical Practice) compliant randomized, double-blind, placebo-controlled Phase 2 trial in subjects with chronic

ischemic stroke.

We are also conducting a Phase 1 open label study to evaluate the safety of implanting NSI-566 in subjects with

Motor Deficits Due to Ischemic Stroke

Over 700,000 individuals suffer stroke

each year in the US, the majority of whom experience long-term functional deficits.

Ischemic stroke, which accounts for about 75%

of all strokes, occurs as a result of an obstruction within a vessel supplying blood to the brain.

Post-stroke motor deficits include

paralysis or weakness in arms and legs and speech impairment and can be permanent.

In the US, approximately 1.8 million people

live with paralysis due to stroke.

We believe that NSI-566 may provide an effective treatment for restoring motor deficits resulting

from ischemic stroke by creating new circuitry in the area of injury and promoting regeneration of neural tissue damaged by the

ischemic event.

Amyotrophic Lateral Sclerosis

Amyotrophic lateral sclerosis is a disease

of the nerve cells in the brain and spinal cord that control voluntary muscle movement.

In 2018 the United States Centers for Disease

Control and Prevention reported that over 16,000 Americans have ALS, a prevalence of 5.2 cases per 100,000 people.

In ALS, nerve

cells (motor neurons) waste away or die and can no longer send messages to muscles.

This eventually leads to muscle weakening,

twitching, and an inability to move the arms, legs, and body.

As the condition progresses, muscles in the chest area stop working,

making it difficult or impossible to breathe.

NSI-566 is under development as a potential treatment for ALS by providing cells

designed to nurture and protect the patient’s remaining motor neurons.

We received orphan designation by the FDA for NSI-566

Chronic Spinal Cord Injury

SCI may result from trauma or disease affecting

the spinal cord, and is in many cases a long term, chronic and disabling neurological condition.

In the US it is estimated that

there are 17,000 new cases of SCI per year, with a prevalence of 249,000-363,000 people.

Chronic spinal cord injury (cSCI) refers

to the window after recovery has plateaued, beginning approximately 6-12 months after injury.

We believe that NSI-566 may provide

an effective treatment for cSCI by “bridging the gap” in the spinal cord circuitry created following traumatic spinal

cord injury and providing new cells to help transmit the signal from the brain to points at or below the point of injury.

The goal of our cell therapy initiatives has been the regeneration of neural function which has been lost to disease or injury.

We believe that neuroprotection, neuroregeneration, and/or bridging of damaged neural circuitry may be accomplished by implantation

of NSI-566 at the injury site.

Clinical Experience with NSI-566

Ischemic Stroke

In 2013 we commenced an open label, non-GCP compliant, Phase I

safety and dose escalation study to test transplantation of NSI-566 in human subjects for the treatment of motor deficits due to

ischemic stroke.

The trial was conducted at BaYi Brain Hospital in Beijing, China and sponsored by Suzhou Neuralstem, a wholly

owned subsidiary of Seneca in China.

This study was intended to evaluate the safety of direct injections of NSI-566 into the brain

and to determine the maximum safe tolerated dose.

We completed dosing the final cohort, for a total of nine subjects, in March

Subjects were monitored through a 24-month observational follow-up period.

Delivery of NSI-566 cells in this population appeared

to be safe and well tolerated at all doses.

There were no deaths or serious adverse events related to the treatment (Zhang et al.,

Stem Cells Transl Med 2019, 8(10):999-1007).

In August 2018, we initiated a non-GCP

compliant Phase 2 trial which is designed as a randomized, double-blind, placebo-controlled study.

A total of 22 subjects were

randomized to receive NSI-566 stem cells (72 million cells) or sham-surgery at a 1:1 ratio.

All operations were conducted at BaYi

Brain Hospital, the site of the Phase 1 study, and all follow-up assessments are being conducted by blinded, independent neurologists

at Beijing Rehabilitation Hospital.

The final subject was enrolled in this study in August 2019, and the final visit for this subject

is scheduled to occur in August of 2020.

Amyotrophic Lateral Sclerosis

In January 2010, we commenced a Phase 1

trial of NSI-566 in ALS at Emory University in Atlanta, Georgia.

The purpose of the trial was to evaluate the safety of our proposed

treatment and procedure in a total of 15 subjects.

The dosing of subjects in the Phase 1 trial, as designed, was completed in August

We commenced a Phase 2 multisite clinical trial in subjects suffering from ALS in September of 2013 to further test the

feasibility and safety of the treatment and procedure, and maximum tolerated dose of cells.

The Phase 2 dose escalation trial enrolled

15 ambulatory subjects in five different dosing cohorts.

In June 2017, 24-month Phase 2 results

and combined Phase 1 and Phase 2 data from our ALS trials were presented at the International Society for Stem Cell Research (ISSCR)

Annual Meeting, Approaches to Treating ALS, Boston, Massachusetts, by principal investigator Eva Feldman, MD, PhD, Russell N.

Professor of Neurology and Director of Research of the ALS Clinic at the University of Michigan Health.

The data showed that the

intraspinal transplantation of the cells was safe and well tolerated.

Subjects from both the Phase 1 and Phase 2 continue to be

monitored for long-term follow-up evaluations.

Chronic Spinal Cord Injury

In 2013, we received authorization from

the FDA to commence a Phase 1 clinical trial to treat chronic spinal cord injury.

The trial, which is taking place at The University

of California, San Diego or UCSD, commenced in 2014 and the first subject was treated in October 2014.

The study enrolled four

AIS A classification thoracic spinal cord injury subjects (motor and sensory complete), one to two years’ post-injury at

the time of stem cell treatment.

In 2013, we received authorization from the

FDA to commence a Phase 1 clinical trial to treat chronic spinal cord injury.

The trial, which took place at The University of

California, San Diego or UCSD, commenced in 2014 and the first subject was treated in October 2014.

The study enrolled four AIS

A classification thoracic spinal cord injury subjects (motor and sensory complete), one to two years’ post-injury at the

time of stem cell treatment.

In January of 2016 we reported six-month follow-up data on all four subjects.

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injuries involving C5-C7 of their spinal cord.

The final patient of this cohort was enrolled in March of 2019.

The final patient of this cohort was enrolled in March 2019.

In June 2018, the study investigators published

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the procedure is well-tolerated.

Pre-Clinical Experience with NSI-566

and other candidates in our stem cell pipeline

Our preclinical studies with NSI-566 have

served to provide the foundation for our ongoing clinical trials by demonstrating performance and efficacy of this cell line in

animal models for ALS (Hefferan et al., PLoS One 2012, 7(8):e42614;

Xu et al., Transplantation 2006, 82(7):865-875;

Xu et al., J Comp Neurol 2009, 514(4):297-309;

Xu et al., Neurosci Lett 2011, 494(3):222-226;

Yan et al., Stem

Cells 2006, 24(8):1976-1985), spinal cord injury (Cizkova et al., Neuroscience 2007, 147(2):546-560;

Lu et al., Cell

2012, 150(6):1264-1273;

van Gorp et al., Stem Cell Res Ther 2013, 4(3):57), and ischemic stroke (Tajiri et al., PLoS

One 2014, 9(3):e91408), and demonstrated safety in large animals (Raore et al., Spine 2011, 36(3):E164-E171;

et al., Cell Transplant 2010, 19(9):1103-1122).

Additional studies involving NSI-566 or other proprietary cell lines are

directed at identifying new therapeutic candidates.

These include:

1) an ongoing collaboration with investigators at the Miami

Project to Cure Paralysis to evaluate the application of NSI-566 in preclinical animal models for traumatic brain injury (Spurlock

et al., J Neurotrauma 2017, 34(11):1981-1995), and 2) evaluation of the ability of NSI-532.IGF1, a human neural stem cell

line engineered to express the trophic factor IGF1, to reverse the cognitive impact of neurodegeneration in a mouse model of Alzheimer’s

Disease (McGinley et al., Sci Rep 2018, 8(1):14776).

NSI-189 (Small Molecule Pharmaceutical

represents a new chemical entity that works through what appears

to be a novel mechanism of action to stimulate neurogenesis of stem cells in the hippocampus, as well as generation of new

Because impaired hippocampal neurogenesis has been linked with depression, w e conducted

clinical trials to evaluate the safety and effectiveness of NSI-189 in patients suffering from Major Depressive Disorder or MDD.

Depressive Disorder (MDD)

depressive disorder (also known as recurrent depressive disorder, clinical depression, major depression, unipolar depression, or

unipolar disorder) is a mental disorder characterized by episodes of all-encompassing low mood accompanied by low self-esteem and

loss of interest or pleasure in normally enjoyable activities.

According to the World Health Organization, MDD is the leading cause

of disability in the U.S.

for persons age 15 to 44.

In 2017, an estimated 17.3 million adults in the United States had at

least one major depressive episode in the prior year.

This number represented 7.1% of all adults in the US.

(https://www.nimh.nih.gov/health/statistics/prevalence/major-depression-among-adults.shtml) .

Treatment of MDD is characterized by a high level of patient turnover due to low efficacy and high side effects.

It is estimated

that 67% of patients will fail their first line therapy, 75% will then fail their second line prescription and 80% will then fail

their third line prescription (Rush et al., Control Clin Trials 2004, 25(1):119-142).

Experience with NSI-189

In 2011 we commenced a Phase 1A clinical

trial to evaluate the safety and pharmacokinetics of NSI-189 in healthy volunteers.

The study enrolled 41 healthy male and female

subjects into a single ascending dose phase.

No dose-limiting toxicity was observed, and no serious adverse events (AE) were noted.

This study was followed in 2012 with a Phase 1B randomized, double-blind, placebo-controlled, multiple-dose escalation study to

evaluate safety, tolerability, pharmacokinetic (PK), and pharmacodynamic (PD) effects of NSI-189 phosphate in subjects with MDD.

Trial data were presented in June 2014 at the American Society of Clinical Psychopharmacology Annual Meeting (ASCP) and published

in the journal Molecular Psychiatry (Fava et al., Mol Psychiatry 2016, 21(10):1372-1380).

NSI-189 was well tolerated and

there were no serious adverse events.

In May of 2016 we initiated an exploratory

Phase 2 randomized, placebo-controlled, double-blind clinical trial for the treatment of MDD in an outpatient setting.

randomized 220 subjects into three cohorts:

NSI-189 40 mg twice daily (BID), NSI-189 40 mg once daily (QD), or placebo, and was

conducted under the direction of study principal investigator (PI) Maurizio Fava, MD, Executive Vice Chair, Department of Psychiatry

and Executive Director, Clinical Trials Network and Institute, Massachusetts General Hospital.

The study did not meet its primary

efficacy endpoint of a statistically significant reduction in depression symptoms on the Montgomery-Asberg Depression Rating Scale

(MADRS), compared to placebo.

Both doses were well-tolerated with no serious adverse events reported.

December 5, 2017, we presented an u pdated analysis – including reports on all secondary scales – from the Phase

2 study of NSI-189 in MDD at the 56th American College of Neuropsychopharmacology (ACNP) Annual Meeting.

Three additional

patient reported outcomes showed statistically significant improvements in depressive and cognitive symptoms;

all three patient

reported outcome scales (SDQ, CPFQ, and QIDS-SR) NSI-189 reached statistical significance over placebo.

In addition, we presented data on NSI-189’s effect on

cognition as measured by computer-administered objective tests of cognition in the MDD patients.

Two different test methods were

Cogstate® and CogScreen®.

Cogstate did not yield statistically significant results.

In CogScreen® test, NSI-189

40 mg showed statistically significant improvement (p<0.05) on objective measures of executive functioning, attention, working

memory, and memory.

NSI-189 appeared to be safe and well tolerated with no serious

adverse events.

There were no clinically meaningful changes in body weight or BMI, or in sexual function inventory.

The study results

have been published (Papakostas et al., Mol Psychiatry 2019, doi:

10.1038/s41380-018-0334-8).

Experience with NSI-189

has shown promise in preclinical studies evaluating its impact in animal models for number of different disease indications, including:

Ischemic stroke—in 2017 Tajiri and colleagues published

a manuscript reporting that NSI-189 ameliorated motor and neurological deficits in a rodent model of ischemic stroke (Tajiri et

al., J Cell Physiol 2017, 232(10):2731-2740)

Radiation-induced cognitive dysfunction—in 2018 Allen

and colleagues published a manuscript reporting that NSI-189 treatment could reverse cognitive deficits in rats caused by cranial

irradiation, a model of cranial radiotherapy in the treatment of brain tumors (Allen et al., Radiat Res 2018, 189(4):345-353).

Angelman syndrome—in 2019 Liu and colleagues published

a manuscript reporting that NSI-189 reversed impairments in cognitive and motor deficits in a rodent model of Angelman syndrome

and increased synaptic strength in sections of brains taken from these animals (Liu et al., Neuropharmacology 2019, 144:337-344).

Angelman syndrome (AS) is a rare congenital genetic disorder caused by a lack of function in the UBE3A gene on the maternal 15th

It affects approximately one in 15,000 people - about 500,000 individuals globally.

Symptoms of AS include developmental

delay, lack of speech, seizures, and walking and balance disorders.

Diabetes-associated peripheral neuropathy—in 2019 Jolivalt and colleagues published a manuscript

reporting that NSI-189 mitigated or reversed disease-associated central and peripheral neuropathy in two rodent models of diabetes

(Jolivalt et al., Diabetes 2019, (11):2143-2154).

Improvements resulting from NSI-189 treatment were seen on multiple sensory

and cognitive indices.

common theme emerging from these and other preclinical studies has been the ability of NSI-189 to promote synaptogenesis as well

as hippocampal neurogenesis, along with its neuroprotective properties.

Due to the favorable safety profile seen in the Phase I

and II clinical studies of NSI-189 and the impact on cognitive measures observed in the Phase II trial in MDD patients, we feel

that this asset may have potential in treatment of one or more diseases including those described above.

On August 9, 2018,

NSI-189 received orphan designation for the treatment of Angelman syndrome.

Our Technologies

a therapeutic perspective, our stem cell-based technology enables the isolation and large-scale expansion of regionally specific,

human neural stem cells from all areas of the developing human brain and spinal cord thus enabling the generation of physiologically

relevant human neurons of different types.

In January 2021, we announced preliminary,

top-line results of the Company's placebo controlled Phase 2 stroke study (non-GCP) that was conducted in Beijing, China.

was designed to evaluate the relative safety of our human neural stem cell therapy, NSI-566, in patients with stable deficits in

motor function resulting from ischemic stroke.

Patients were eligible for the trial if they had documented history of ischemic

stroke at least four months, but no more than 24 months, before surgery.

The study enrolled 23 patients who were randomly

assigned to treatment or placebo arms.

Patients in the treatment arm received intracerebral injection of 72 million stem cells,

whereas those in the placebo group underwent a sham surgery procedure.

Secondary objectives to evaluate efficacy were performed

by qualified assessors who were blinded to treatment assignment, and included the Fugl-Meyer Motor Score (FMMS), an assessment

of upper and lower motor function that comprises a 100-point scale and is widely used following stroke.

Patients enrolled in the treatment and placebo

arms had similar baseline FMMS scores before surgery (mean ± SD:

36.80 ± 8.59 and 35.80 ± 4.66, respectively).

While most participants showed some improvement in FMMS from pre-surgery scores, the mean improvement after one year was greater

in those participants receiving NSI-566 (n=10, mean ± SD:

12.20 ± 14.15) compared to placebo (n=10, 6.30 ±

5.14), though the difference between groups did not reach statistical significance using the approximate Student's t-test (MMRM)

Two participants in the treatment arm showed clinically important improvements of 32 and 44 points on the FMMS following

treatment with NSI-566, whereas the largest improvement observed in the placebo group was 17 points.

Participants in the treatment

arm experienced a total of three serious adverse events (SAE) that were considered by the investigator to be probably or possibly

related to treatment, whereas no patients in the placebo arm experienced SAEs.

Treatment-related SAEs were resolved with standard

medical care and were limited to impaired healing at the incision site and wound dehiscence in one patient, and impaired hepatic

function in another.

NSI-189 (Small Molecule Pharmaceutical Compound)

NSI-189 represents a new chemical entity that

works through what appears to be a novel mechanism of action to stimulate neurogenesis of stem cells in the hippocampus, as well

as generation of new synapses.

Because impaired hippocampal neurogenesis has been linked with depression, we conducted clinical

trials to evaluate the safety and effectiveness of NSI-189 in patients suffering from Major Depressive Disorder or MDD.

Out-license of NSI-189

In December 2020, we licensed certain patents

and technologies, including a sublicense, related to the NSI- 189 small molecule program for $100,000 up front for a three (3)

year period, plus, upon the occurrence of certain events, the licensee has the right to purchase the NSI-189 small molecule program

for $5,000,000 at any time before the three (3) year period expires.

Seneca’s Technologies

From a therapeutic perspective, our stem cell-based

technology enables the isolation and large-scale expansion of regionally specific, human neural stem cells from all areas of the

developing human brain and spinal cord thus enabling the generation of physiologically relevant human neurons of different types.

We believe that our stem cell technology will enable the replacement or supplementation

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cell types in the body.

Our focus is the development of effective methods to generate replacement cells from neural stem cells.

We believe that creating a neurotrophic environment by replacing damaged, malfunctioning or dead neural cells with fully functional

ones may be a useful therapeutic strategy in treating many diseases and conditions of the central nervous system.

Our Proprietary and Novel Screening Platform

Our human neural stem cell lines form the

foundation for functional cell-based assays used to screen for small molecule compounds that can impact biologically relevant outcomes

such as neurogenesis, synapse formation, and protection against toxic insults.

We have developed over 300 unique stem cell lines

representing multiple different regions of the developing brain and spinal cord at multiple different time points in development,

enabling the generation of physiologically relevant human neural cells for screening, target validation, and mechanism-of-action

This platform provides us with a unique and powerful tool to identify new chemical entities to treat a broad range of

nervous system conditions.

Small Molecule Pharmaceutical Compounds.

Utilizing our proprietary stem cell-based

screening capability, we have discovered and patented a series of small molecule compounds that includes NSI-189.

We believe our

low molecular weight organic compounds can efficiently cross the blood/brain barrier.

In mice, research indicated that the small

molecule compounds both stimulate neurogenesis of the hippocampus and increase its volume.

We believe the small molecule compounds

may promote synaptogenesis and neurogenesis in the human hippocampus thereby potentially providing therapeutic benefits in indications

such as MDD and may also provide clinical benefit in indications such as Angelman Syndrome, Diabetic Neuropathy, Cognition, Stroke

and Radiation Induced Cognitive Deficit.

Research and Development

Substantial resources have been and will

be devoted to our research and development programs.

Our efforts are directed at developing therapies utilizing our stem cells

and small molecule regenerative drug candidates.

This research is conducted internally, through the use of third party laboratories,

consulting companies under our direct supervision, and through collaboration with academic institutions.

Manufacturing

We currently manufacture our cells both

in-house and on an outsourced basis.

We outsource the manufacturing of our pharmaceutical compounds and our clinical supply of

stem cells to cGMP compliant third-party manufacturers.

We manufacture neural stem cells in-house for use in our research and collaborative

Our focus is the development of effective methods to generate

replacement cells from neural stem cells.

We believe that creating a neurotrophic

environment by replacing damaged, malfunctioning or dead neural cells with fully functional ones may be a useful therapeutic strategy

in treating many diseases and conditions of the central nervous system.

Intellectual Property

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the use of confidentiality agreements with our employees, consultants and certain of our contractors.

Our policy is to require our employees,

consultants and significant scientific collaborators and sponsored researchers to execute confidentiality and assignment of invention

agreements upon the commencement of an employment or consulting relationship with us.

These agreements generally provide that all

confidential information developed or made known to the individual by us during the course of the individual's or entity’s

relationship with us, is to be kept confidential and not disclosed to third parties except in specific circumstances.

of employees and consultants, the agreements generally provide that all inventions conceived by the individual or entity in the

course of rendering services to us shall be our exclusive property.

In-licensing or Acquisition Strategy

In addition to the development of our current

product candidates, we have initiated an in-licensing and/or acquisition strategy to further expand our product pipeline.

Our in-licensing

strategy consists of evaluating novel therapeutics with the potential to be complimentary to our current technologies or that could

benefit from our development experience with the goal of developing such candidates for commercialization.

We believe that this

element of our corporate strategy could provide new opportunities for product development and diversify risks inherent in focusing

on a limited product portfolio and therapeutic areas, thus potentially increasing our probability of commercial success.

Our policy is to require our employees, consultants

and significant scientific collaborators and sponsored researchers to execute confidentiality and assignment of invention agreements

upon the commencement of an employment or consulting relationship with us.

These agreements generally provide that all confidential

information developed or made known to the individual by us during the course of the individual’s or entity’s relationship

with us, is to be kept confidential and not disclosed to third parties except in specific circumstances.

In the case of employees

and consultants, the agreements generally provide that all inventions conceived by the individual or entity in the course of rendering

services to us shall be our exclusive property.

The pharmaceutical and biotechnology industries

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Moreover, many of

these competitors may be able obtain patent protection, or FDA and other regulatory approvals that may impede our freedom to develop

and commercialize our programs.

The diseases and medical conditions we

are targeting have a demographic in which there are large numbers of patients who do not respond to current therapies or have limited

these competitors may be able obtain patent protection, or FDA and other regulatory approvals that may impede on our freedom to

develop and commercialize our proposed products.

The diseases and medical conditions we are

targeting have a demographic in which there are large numbers of patients who do not respond to current therapies or have limited

therapies available.

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on the basis of improved and extended efficacy and safety and their overall economic benefit to the health care system.

for our products may be in the form of existing and new drugs, other forms of cell transplantation, surgical procedures, gene therapy

to our products may be in the form of existing and new drugs, other forms of cell transplantation, surgical procedures, gene therapy

or other proprietary technology and expertise.

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or when approved, based on efficacy, safety, cost and intellectual property positions.

We cannot be certain that that other entities

We cannot be certain that other entities

have not filed patents that block our freedom to commercialize our programs and we may be required to seek licenses from these

entities in order to commercialize certain of our proposed products, and such licenses may not be granted or be extremely expensive

If we develop products that receive regulatory

approval, they would then have to compete for market acceptance and market share.

For our potential products, an important success

factor will be the timing of market introduction of competitive products.

This timing will be a function of the relative speed

with which we and our competitors can develop products, complete the clinical testing and approval processes, and supply commercial

quantities of a product to the market.

These competitive products may also impact the timing of clinical testing and approval processes

by limiting the number of clinical investigators and subjects available to test our potential products.

Government Regulation

Regulation by governmental authorities

in the United States and other countries is a significant factor in our research and development and will be a significant factor

in the manufacture and marketing of our proposed products.

The nature and extent to which such regulation applies to us will vary

depending on the nature of any products we may develop.

Governmental authorities, including the FDA and comparable regulatory authorities

in other countries, regulate the design, development, testing, manufacturing, safety, efficacy, labeling, storage, record-keeping,

advertising, promotion and marketing of pharmaceutical products, including drugs and biologics, under the Federal Food, Drug, and

Cosmetic Act, or FFDCA, and its implementing regulations, and, for biologics, under the Public Health Service Act, or PHSA, and

its implementing regulations.

Non-compliance with applicable requirements can result in fines and other judicially imposed sanctions,

including product seizures, import restrictions, injunctive actions and criminal prosecutions of both companies and individuals.

Regulation by governmental authorities in the

United States and other countries is a significant factor in our research and development and will be a significant factor in the

manufacture and marketing of our proposed products.

The nature and extent to which such regulation applies to our products will

vary depending on the nature of any products we may develop.

Governmental authorities, including the FDA and comparable regulatory

authorities in other countries, regulate the design, development, testing, manufacturing, safety, efficacy, labeling, storage,

record-keeping, advertising, promotion and marketing of pharmaceutical products, including drugs and biologics, under the Federal

Food, Drug, and Cosmetic Act, or FDCA, and its implementing regulations, and, for biologics, under the Public Health Service Act,

or PHSA, and its implementing regulations.

Non-compliance with applicable requirements can result in fines and other judicially

imposed sanctions, including product seizures, import restrictions, injunctive actions and criminal prosecutions of both companies

and individuals.

In addition, administrative remedies can involve requests to recall violative products;

the refusal of the government to enter

into supply contracts;

or the refusal to approve pending product approval applications until manufacturing or other alleged deficiencies

are brought into compliance.

The FDA also has the authority to cause the withdrawal of approval of a marketed product or to impose

labeling restrictions.

The process of obtaining approvals and the subsequent compliance with appropriate statutes and regulations

require the expenditure of substantial time and money, and there can be no guarantee that approvals will be granted.

United States Product Development Process

We believe that, in the United States, our human neural stem

cell candidates are regulated as biologic pharmaceuticals, or biologics, and our small-molecule compounds are regulated as drugs.

The process required by the FDA before

a drug or biological product may be marketed in the United States generally involves the following:

• Completion of preclinical testing of new pharmaceutical or biological products,

generally conducted in the laboratory and in animal studies in accordance with Good Laboratory Practice or GLP standard, and applicable

requirements for the humane use of laboratory animals or other applicable regulations to evaluate the potential efficacy and safety

of the product candidate;

• Submission of the results of these studies to the FDA as part of an Investigational

New Drug application or IND, which must become effective before clinical testing in humans can begin;

• Manufacturing of investigational medicine under current Good Manufacturing Practice

or cGMP standard;

• Performance of adequate and well-controlled human clinical trials according to Good

Clinical Practice or GCP and any additional requirements for the protection of human research patients and their health information,

to establish the safety and efficacy of the product candidate for its intended use;

• Submission to the FDA of a biological license application, or BLA, for any biologic or a new drug application, or NDA, for any

new chemical entity drug we seek to market that includes substantive evidence of safety, purity, and potency, or safety and

effectiveness from results of nonclinical testing and clinical trials;

• Satisfactory completion of an FDA inspection of the manufacturing facility or facilities

where the product is produced, packaged and distributed, to assess compliance with cGMPs, to assure that the facilities, methods

and controls are adequate to preserve the product’s identity, strength, quality and purity, and, if applicable, the FDA’s

current good tissue practices, or GTPs, for the use of human cellular and tissue products;

• Potential FDA audit of the nonclinical study and clinical trial sites that generated

the data in support of the BLA or NDA;

• FDA review and approval of the NDA, or licensure, of the BLA.

Typically, human clinical evaluation involves

a time-consuming and costly three-phase process.

The product is initially introduced into healthy human volunteers and tested

In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently

toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

The product is evaluated in a limited patient population to identify possible

adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine

dosage tolerance, optimal dosage and dosing schedule.

Clinical trials are undertaken to further evaluate dosage, clinical efficacy,

potency, and safety in an expanded patient population at geographically dispersed clinical trial sites.

These clinical trials are

intended to establish the overall risk to benefit ratio of the product and provide an adequate basis for product labeling.

Post-approval clinical trials, sometimes

referred to as Phase 4 clinical trials, may be required and conducted after initial marketing approval.

These clinical trials are

used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term

safety follow-up.

the refusal of the government

to enter into supply contracts;

or the refusal to approve pending product approval applications until manufacturing or other alleged

deficiencies are brought into compliance.

The FDA also has the authority to cause the withdrawal of approval of a marketed product

or to impose labeling restrictions.

The process of obtaining approvals and the subsequent compliance with appropriate statutes

and regulations require the expenditure of substantial time and money, and there can be no guarantee that approvals will be granted.

During all phases of clinical development,

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United States Review and Approval Process

After the completion of clinical trials

of a product candidate, FDA approval of a BLA or NDA must be obtained before commercial marketing of the product.

The BLA or NDA

must include results of product development, laboratory and animal studies, human trials, information on the manufacture and composition

After the completion of clinical trials of

a product candidate, FDA approval of a BLA or NDA must be obtained before commercial marketing of the product.

The BLA or NDA must

include results of product development, laboratory and animal studies, human trials, information on the manufacture and composition

of the product, proposed labeling and other relevant information as well as a significant user fee.

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on a timely basis, if at all.

The FDA may refuse to file any BLA or NDA

that it deems incomplete or not properly reviewable at the time of submission, and may request additional information.

submission is accepted for filing, the FDA reviews the BLA or NDA to determine, among other things, whether the proposed product

is safe, potent, and/or effective for its intended use, and has an acceptable purity profile, and whether the product is safe and

effective for its intended use, and in each case, whether the product is being manufactured in accordance with cGMP or GTP, if

During the product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy,

or REMS, is necessary to assure the safe use of the product.

If the FDA concludes a REMS is needed, the sponsor of the BLA or NDA

must submit a proposed REMS.

The FDA may refuse to file any BLA or NDA that

it deems incomplete or not properly reviewable at the time of submission, and may request additional information.

Once the submission

is accepted for filing, the FDA reviews the BLA or NDA to determine, among other things, whether the proposed product is safe,

potent, and/or effective for its intended use, and has an acceptable purity profile, and whether the product is safe and effective

for its intended use, and in each case, whether the product is being manufactured in accordance with cGMP or GTP, if applicable.

During the product approval process, the FDA also will determine whether a Risk Evaluation and Mitigation Strategy, or REMS, is

necessary to assure the safe use of the product.

If the FDA concludes a REMS is needed, the sponsor of the BLA or NDA must submit

a proposed REMS.

The FDA will not approve a BLA or NDA without a REMS, if required.

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GTP and other laws.

The FDA also may require post-marketing

testing, known as Phase 4 testing, and surveillance to monitor the effects of an approved product.

Discovery of previously unknown

problems with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse

publicity, judicial or administrative enforcement, warning letters from the FDA, mandated corrective advertising or communications

with doctors, and civil or criminal penalties, among others.

Also, new government requirements, including those resulting from

new legislation, may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of

our product candidates under development.

The FDA also may require post-marketing testing,

known as Phase 4 testing, and surveillance to monitor the effects of an approved product.

Discovery of previously unknown problems

with a product or the failure to comply with applicable FDA requirements can have negative consequences, including adverse publicity,

judicial or administrative enforcement, warning letters from the FDA, mandated corrective advertising or communications with doctors,

and civil or criminal penalties, among others.

Also, new government requirements, including those resulting from new legislation,

may be established, or the FDA’s policies may change, which could delay or prevent regulatory approval of our product candidates

under development.

European, China and Other Regulatory Review and Approval

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Other Health Care Laws

In the event any of proposed products are

In the event any of our proposed products are

ever approved for marketing, we may also be subject to healthcare regulation and enforcement by the federal government and the

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result from future legislation or administrative action.

For additional information about governmental

regulations as well as risk related to our business that could affect our planned and intended business operations, see the “Risk

Factors” Section of this Annual Report.

As of February 29, 2020, we had five full-time

We also use the services of numerous outside consultants in business and scientific matters.

As of December 31, 2020, we had seven (7) full-time

We anticipate that upon the consummation of the merger with Leading BioSciences, Inc., we will terminate our current

employees and consultants.

We also use the services of several outside consultants in business and scientific matters.

Historically,

we have not implemented measures or objectives to address the development, attraction and retention of personnel and have instead

hired employees and utilized the services of outside consultants as needed to run our operations.

We currently operate one facility located in

the United States and one facility located in China.

Our corporate offices and primary research facilities are located in Germantown,

Maryland, where we lease approximately 1,500 square feet.

This lease provides for monthly payments of approximately $5,600 per

month and expires on December 31, 2021.

We also lease approximately 11,300 square feet

of research facility in the People’s Republic of China.

This lease commenced in September 2019, provides for minimum lease

payments of approximately $4,400 per month, expires in September 2024 and provides us with a future first right of refusal for

extending the lease beyond its expiration.

Our Corporate Information

We were incorporated in Delaware in 2001.

We were incorporated in Delaware in 2001 under

the name Neuralstem, Inc.

On October 28, 2019, we changed our name from Neuralstem, Inc.

to Seneca Biopharma, Inc.

Our principal executive offices are located

at 20271 Goldenrod Lane, Germantown, Maryland 20876, and our telephone number is (301) 366-4841.

Our principal

executive offices are located at 20271 Goldenrod Lane, Germantown, Maryland 20876, and our telephone number is (301) 366-4841.

Our website is located at www.senecabio.com.

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Where to Find More Information

We make our public filings with the SEC,

including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all exhibits

and amendments to these reports.

Also, our executive officers, directors and holders of more than 10% of our common stock, file

reports with the SEC on Forms 3, 4 and 5 regarding their ownership of our securities.

These materials are available on the

SEC’s web site, http://www.sec.gov .

You may also read or copy any materials we file with the SEC at the SEC’s

Public Reference Room at 100 F Street, N.E., Washington, DC 20549.

You may obtain information on the operation of the

Public Reference Room by calling the SEC at 1-800-SEC-0330.

Alternatively, you may obtain copies of these filings, including exhibits,

by writing or telephoning us at:

We make our public filings with the SEC, including our Annual Report

on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all exhibits and amendments to these

Also, our executive officers, directors and holders of more than 10% of our common stock, file reports with the SEC on

Forms 3, 4 and 5 regarding their ownership of our securities.

These materials are available on the SEC’s web site, http://www.sec.gov .

You may also read or copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street,

N.E., Washington, DC 20549.

You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

Alternatively, you may obtain copies of these filings, including exhibits, by writing or telephoning us at:

SENECA BIOPHARMA, INC

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business